WHOLESALE gas prices have rocketed by almost half due to "market normalisation" according to a report.
The latest Business Energy Report by Vayu Energy should a 46 per cent rise in prices in October compared to last month.
It said the change came as the market adjusted from the "significant supply overhang" during September that prompted lows not seen since 2009.
Wholesale gas prices are up 5 per cent in October compared to the same month in 2015.
The report also revealed electricity prices to be 27 per cent up year-on-year.
Looking at contracts, Vayu's senior energy analyst Gillian Lawler said they were driven by movements in both the euro to sterling exchange rate and Brent crude at the beginning of the month.
“A stronger euro relative to the pound and gains made on oil pushed curve contracts up," she said.
"The pound fell relative to the euro following the announcement that the UK will begin the process to leave the EU by the end of March 2017. The current outlook is for contracts to stay in positive territory with the rally in oil expected to continue and weakness of sterling still holding.
"An informal OPEC meeting on proposed output cuts on October 6 helped oil prices firm and they hit four month highs. Oil jumped by more than $6/bbl since the group announced at talks on September 28 that it hopes to reduce output to 32.5/33 million barrels per day. This would remove 700,000 barrels per day from the global supply glut.
"Associated gains on gas contracts were capped somewhat as the pound plummeted to its lowest level since March 2010.
"Oil soared to its highest point of the year on October 10 with Russia announcing that it is willing to join the production cut agreed by OPEC members.
"Gas contracts made gains initially, but these were not sustained due to concerns that the supply cut may not in fact stem the global oil over-supply."
